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Agreed reforms pave the way for Berlusconi's resignation

Dario Thuburn

Italian Prime Minister Silvio Berlusconi is set to resign after a parliamentary revolt and a wave of market panic that has shaken the eurozone.

Italian Prime Minister Silvio Berlusconi was set to resign on Saturday after a parliamentary revolt and a wave of market panic that has shaken the eurozone, leaving an uncertain political future.

Lawmakers approved a package of economic reforms that Berlusconi, who has been in power for 10 of the past 17 years, had set as a condition for quitting.

He is now expected to announce his exit at a Cabinet meeting and then formally submit his resignation to Italian President Giorgio Napolitano.

“We hope today [Saturday] marks the beginning of a new spring in Italy,” Massimo Donadi, a lawmaker from the opposition Italy of Values party, said during a tumultuous session of Parliament with jeering from both sides of the house.

Dario Franceschini of the main opposition Democratic Party said, “Today the curtain falls on a long and painful phase of Italian political history.

“The country wants to turn the page and start again.”

‘Bye bye Silvio’
Fabrizio Cicchitto of Berlusconi’s People of Freedom party, said, “We thank Berlusconi for what he has done for all these years”.

Hundreds of anti-Berlusconi campaigners rallied outside Parliament holding up placards reading “Bye Bye Silvio” and waving Italian flags.

“Resign! Resign! Resign!” the crowd shouted.

Former EU commissioner Mario Monti, a 68-year-old economist with a formidable reputation but no experience in political office, is seen as the most likely contender to receive the mandate to form a new government.

European Central Bank President Mario Draghi, the former governor of the Bank of Italy who took over in Frankfurt just this month, met with Monti in Rome on Saturday in what was interpreted as an implicit endorsement.

International Monetary Fund chief Christine Lagarde added her voice to calls from US President Barack Obama, French President Nicolas Sarkozy and others for Italy to form a new government instead of declaring early elections.

Early elections
Monti has received backing from the opposition as well as the business world. But parts of Berlusconi’s coalition have said they want early elections.

The 75-year-old prime minister himself has said he wants elections but in a possible sign of a change of heart and in what could be one of his last meetings as prime minister, Berlusconi had lunch with Monti on Saturday.

Italy’s top-selling Corriere della Sera daily said the centre-right was “playing with fire” by refusing to get behind a new government, warning of market mayhem if there is no new cabinet by the beginning of next week.

“If Italy wastes more time following the resignation of Berlusconi expected today, it would mean sacrificing ourselves on the altar of financial speculation and in an irreversible way,” the paper said in an editorial.

Napolitano would be forced to call early elections if there is no majority behind a transition government. Under the current timetable, the next parliamentary elections are only due in 2013.

There was little grief among ordinary Italians at the political demise of Berlusconi with latest polls giving the media tycoon an approval rating of just 22% following a wave of sex scandals and legal troubles.

Arianna Sellerio, a pensioner walking through Rome’s city centre, said she was glad he was leaving. “This was the worst government since [fascist dictator Benito] Mussolini. The worst, the most dishonest, the most shameful,” she said.

‘That’s all folks’
Many in the international community also want to see the back of him.

The latest cover of the Economist news weekly, which has had a long feud with Berlusconi since declaring him “unfit to lead Italy” in 2001, carried a photo of the tycoon preening himself with the headline: “That’s all, folks.”

Berlusconi announced on Tuesday he would resign, igniting panic on the markets over fears of a prolonged political crisis in Rome.

Italy’s long-term borrowing costs rose above 7%—a danger level that could make the country’s debt unsustainable within months.

Reports of Monti’s impending nomination helped ease the jitters.

But the toxic mix of a €1.9-trillion debt, an extremely low growth rate and high borrowing costs has raised concerns that the eurozone’s third largest economy may be forced to seek a bailout.

The IMF and the European Financial Stability Facility have both reportedly offered financial help. Economists warn that, unlike fellow eurozone members Greece, Ireland and Portugal, Italy may be “too big to bail”.

Berlusconi reluctantly agreed to special EU-IMF monitoring of Italy’s accounts at a G20 summit last week, prompting his opponents to carp that the country is now effectively “under external administration”.—AFP

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